Three Times and Out for California Tribe

SACRAMENTO (CN) — A federal judge Wednesday threw out a Northern California tribe’s attempt to recover millions in casino funds it claims was embezzled by former tribal officials. Ending a 19-month-long dispute, U.S. District Judge Morrison England Jr. dismissed with prejudice the Paskenta Band of Nomlaki Indians’ third amended complaint against former tribal employees and several banks. The 250-member Paskenta Band, 100 miles north of Sacramento near Corning, operates Rolling Hills Casino and accused several employees of stealing more than $20 million in retirement funds with cooperation from local banks. It sought punitive damages against 20 defendants, for negligence, aiding and abetting, and contract claims. England found the tribe failed to sufficiently plead new claims and dismissed the lawsuit entirely. The tribe argued last year that former employees Ines Crosby and Leslie Lohse routinely made large and unauthorized withdrawals with the cooperation of defendant Umpqua Bank, but England found that the tribe allowed the defendants to remain authorized signers of the bank accounts even after local media reported on the tribe’s concerns. The tribe, on its third attempt, again failed to argue its claims against the bank, England ruled. “Plaintiffs merely reiterate that the Umpqua defendants knew that the employee defendants were under suspicion of stealing or converting millions of dollars from the tribe. These allegations in the second amended complaint did not make it sufficiently plausible that Umpqua defendants had actual or constructive knowledge of any wrongdoing by the employee defendants,” the ruling states. “Additionally, because plaintiffs have failed to add any new allegations despite being given leave to amend their second complaint, it has become apparent that further leave to amend would be futile,” England added. The Paskenta initially claimed that four former officials used vote-rigging, bribery and extortion to take control of the tribe and its principal non-casino business entity during a decade-long scheme. It claimed that defendants Leslie and Larry Lohse spent $17 million on the jet they used to transport their son, Kyle Lohse, who was a pitcher for the St. Louis Cardinals at the time. A federal judge threw out several of the tribe’s claims in August 2015 and denied its request for a preliminary injunction to freeze assets. But U.S. District Judge Garland Burrell Jr. allowed the case to proceed, despite the defendants’ claims that it was simply an intra-tribal dispute. The tribe did not immediately return an email request for comment Thursday afternoon.